Logistics sector will determine demand for Toronto's industrial spaces

Logistics sector will determine demand for Toronto's industrial spaces

Logistics sector will determine demand for Toronto

The specific needs of the logistics and e-commerce segments will make some commercial and industrial properties in Toronto more desirable than others, according to the latest report by Avison Young released last week.

In its study titled Intermodal Logistics in the Greater Toronto Area: The Relevance of Intermodal in the E-commerce Era, Avison Young stated that the city’s existing intermodal terminals (CN Brampton and CP Vaughan) along with the planned CN Milton will significantly increase the value of nearby industrial spaces.

“Retailers, manufacturers and distributors are taking advantage of the efficiencies of this affordable, reliable and adaptable form of shipping on local, national and international scales,” Avison Young explained.

“Increasingly, industrial real estate close to intermodal facilities is in great demand as organizations with logistics and distribution needs have the potential to increase efficiencies dramatically and reduce costs by locating their premises close to these terminals.”

Read more: Logistics firms acquiring Toronto’s commercial spaces at a rapid pace

These locations will play a crucial role in being hubs for shipments to and from all over North America, Bill Argeropoulos of Avison Young said.

“In the past, industrial space was predominantly used for manufacturing activities, and many buildings were serviced by direct rail-spur connections,” Argeropoulos explained. “Today, logistics, distribution and warehousing are the main industrial-space uses; as a result, many of these rail spurs have been removed, giving way to greater use of container shipments via intermodal facilities.”

The primacy of quick delivery also means that the sector will be looking at strategically placed local distribution points.

“As a result of the need for increased last-mile efficiencies, demand for industrial real estate more connected to the masses is outpacing supply, reducing vacancy and raising rental rates for buildings within last-mile zones.”